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Netsuit ERP Oracle Ebook 8WaysLegacyERP
Netsuit ERP Oracle Ebook 8WaysLegacyERP
Netsuit ERP Oracle Ebook 8WaysLegacyERP
LEGACY ERP
HARMS
BUSINESSES
www.netsuite.com
8 Ways Legacy ERP
Harms Businesses
Read Time: 23 min.
When was the last time you upgraded your ERP system? Not just
patched, fixed or tinkered with it—but implemented a substantive
upgrade that enabled real business innovation, generated
excitement and unleashed a wave of ideas and productivity from
your users? You know—the same kinds of enthusiasm that greets
web or iPhone apps like Instagram, Spotify, Netflix, etc.?
Remember when your business environment was like this? Is your ERP still
stuck in the Stone Age?
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ERP customers are on releases that are two versions behind
the current release, which may be four years old or more.”1 In
today’s fast-moving environment, that may as well be in the Stone
Age. More than likely, your ERP was designed in an era where
fax machines were still relevant, channels were slowly grown
over time, and going global meant owning expensive global
infrastructure to support growth.
The fact is that the world is innovating faster than ever, but ERP
installations seem to stay frozen in time. It’s hard to believe
that an outdated, five-year-old ERP system can be relevant to a
business in a hyperactive world.
1
ERP Customers Demand Better Flexibility, Cost Transparency, and Mobility, Forrester Research
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It’s no wonder, according to a survey published in CIO magazine
some time ago, that only 4 percent of IT leaders believe their
ERP systems create competitive advantage. The competitive
advantage vanished long ago.
sho pping
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The Danger of “Version-Locked” ERP
The sad reality is that for almost every business, “version-lock”
is the Achilles heel of their on-premise ERP. Customizations
to an ERP that seemed so innocuous at the beginning of an
implementation years ago have built up over time like silicon
plaque. Gradually, your ERP becomes hardened to change
because an upgrade to on-premise technology means
re-implementing and testing those custom schema changes,
integrations, workflows and reports.
2
Forrester Forrsights
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processes that haven’t changed in decades? The reality is
that the damage is real, and while your ERP has your business
stuck in quicksand, your competitors are not standing still. Your
business needs ERP that supports real transformation, and that
outdated ERP system you’re running simply isn’t aligned
with the business environment in which you and your
competitors operate.
But over the last few years, the pace of business and innovation
has accelerated dramatically. Today’s speed of change places
stresses on business process. Worker expectations have
changed on how they want to engage with your business
systems. And your customers have changed the way they want
to engage with you. Businesses can now go global in an instant,
ecommerce has opened up new sales and customer service
channels and the last decade has seen the birth of several
hyper-growth companies.
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Fact: Between 50%
and 90% or more of a
typical IT Budget is spent
on maintenance, not
innovation.
It’s time to explore the eight ways that your aging ERP system is
holding back your business.
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Analysts from Forrester to Gartner measure this allocation
closely, and find that maintenance spend can range from
50 percent to more than 90 percent of a typical IT budget.
Only a fraction is left over for meeting business needs. It’s
no wonder, considering the average cost of SAP deployment
can be between $12 million and $17 million, according
to CIO magazine.3 Subsequent recurring maintenance
fees, infrastructure upgrades, integrations and ongoing IT
maintenance can quickly consume the IT budget.
10% Innovation
90%
Maintenance
3
Why ERP Is Still So Hard, CIO Magazine, Thomas Wailgum
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But your competitors are already changing their budget
allocation—and cloud computing is the tool that enables
them to do it, by cutting IT costs by 50 percent or more.4
They’re able to reduce spend on maintenance, and increase
spend on such value-added activities as creating new
cross-functional workflows and reporting processes, adding
sales channels, entering new markets and improving
connectedness between internal and external systems. That
adds up to a decided competitive advantage, while the
company gains enterprise security, redundancy and data
recovery that would be cost-prohibitive as internal company
initiatives.
4
How TCO Benefits Make Cloud Computing a No-Brainer for Many SMBs and Mid-Market Enterprises
SMB Group, Inc. February 2013
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“We were spending 3 percent of our revenue on SAP. By
switching to NetSuite, we reduced that cost to 0.1 percent
of revenue.” – Asahi Kasei, Spandex America
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TCO for NetSuite cloud is 50 percent less than legacy on-premise.
1,600
1,200
800
400
0
Year 1 Year 2 Year 3 Year 4
The fact is that your on-premise ERP will never track with
change—because on the rare occasion you upgrade it, the
operating environment will already have changed, and
spreadsheets and personnel once again rush to fill the gap.
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Has your operating environment changed but your ERP stayed the same?
Welcome to spreadsheet hell.
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ERP systems. Had these companies relied on an upgrade
to the installation of their on-premise ERP system to take
advantage of innovation, who knows where they’d be today?
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“NetSuite requires as little as 10% of the implementation effort
normally associated with an ERP deployment.” – Nucleus Research
Old ERP was never designed for the post-PC era of the
anytime, anywhere workforce, but cloud applications are. In
fact, no matter how much you upgrade your old PC-era ERP
system, it will never be easy to access over mobile devices
because it was not initially architected with the web in mind
and, in some cases, was engineered before the Internet
was invented. On the other hand, web-based cloud ERP
applications are optimized for bringing the world of mobile
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computing together with ERP, enabling your employees to
monitor and manage the business from anywhere on any
device. For example, without any IT setup work, NetSuite
cloud ERP can be accessed from anytime, anywhere via any
web browser, whether IE, Chrome, Safari or Firefox, and any
mobile device, whether iPads, iPhone, Androids or whichever
device hits the market next.
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maintaining visibility and control, but old ERP holds them
back from achieving those goals.
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6. Legacy ERP Fails to Satisfy the Appetite for Real-Time
Information
If you’re running legacy ERP like Sage MAS or Microsoft
Dynamics GP, you know the drill. Your business is running on
spreadsheets, and management reporting is an onerous and
error-prone exercise. You’ve got employees dedicated to
the job of simply reporting, or reporting consumes the lion’s
share of their day.
5
Five Prevailing Trends In ERP, Forrester Research
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And for good reason—there’s a gulf between what financial
managers need and what their ERP is delivering. Custom
ABAP reporting in an SAP ERP system, static Crystal Reports
or out-of-date spreadsheets emailed among managers
just aren’t enough. Your ERP is starving your business of
information, forcing you to make strategic and tactical
decisions based on out-of-date, incomplete or simply
erroneous data.
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7. Stone Age ERP Walls Your Business Off from Suppliers,
Channels and Customers
Everything has become connected through the cloud. Your
customers are no longer content to wait on the phone to
check an order; they want to browse your website to get
their order status right now. Your suppliers stand ready to
drop-ship your orders in real-time rather than forcing you to
tie up capital in inventory.
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if they can’t easily view pricing and inventory information on
your website, or check the status of orders or returns. You’re
frustrated if you can’t switch suppliers on demand, because
the effort requires yet more expensive integrations.
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could offload his reporting to the finance staff, and you could
hire another IT guy to make an ERP process change.
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“Version-less” cloud ERP enables enterprises to experience ERP
innovation as fast as consumers experience innovation in the
enhanced web applications they use every day. It continuously
aligns your ERP with your business operating environment.
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SaaS Benefits Emphasize Agility and Speed
Speed of implementation
and deployment 72%
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“NetSuite is the most successful ERP suite SaaS provider operating
in terms of active customers, international presence and
functionality offered across the product.” – Gartner
NetSuite On-Premise
Competitive Advantage
Cloud ERP
1 Realign towards innovation focused IT spend Yes No
Oracle NetSuite Global Business Unit, a wholly-owned subsidiary of Oracle, pioneered the
Cloud Computing revolution in 1998, establishing the world’s first company dedicated to
delivering business applications over the Internet. Today, Oracle NetSuite Global Business
Unit provides a suite of cloud-based financials/Enterprise Resource Planning (ERP) and
omnichannel commerce software that runs the business of companies in more than 100
countries. For more information, please visit www.netsuite.com.
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www.netsuite.com
info@netsuite.com
877-638-7848
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